PGR.L Regulatory News (PGR)

11 July 2012

Andes Energia plc

("Andes" or "the Company")

Demerger Completion

The Board of Andes Energía PLC (AIM:AEN; BCBA:AEN), the Latin American energy group, is pleased to announced that, further to the circular posted to shareholders on 9 June 2012, the High Court of Justice of England and Wales today confirmed the Reduction of Capital. The court order (together with the statement of capital attached there to) has been delivered to the Registrar of Companies and the Reduction of Capital is now effective.

The Capital Reorganisation will result in a Shareholder receiving for each Andes Share held before the Demerger, 0.674 New Andes Shares and one Andina Share for every 2.067484663 New Andes Shares received.

The purpose of the Capital Reorganisation is to ensure that the aggregate number of ordinary shares in issue in respect of both Andes and Andina equals the number of Andes Shares in issue immediately prior to the Capital Reorganisation taking effect, subject to the rounding of any fractions. Any fractions arising as a result of the Consolidation have been aggregated and the Directors will, in accordance with the Articles, sell the aggregated shares in the market for the benefit of the relevant Shareholders. The proceeds from the sale of the fractional entitlements shall be distributed pro rata amongst the relevant Shareholders, save that where a Shareholder is entitled to an amount which is less than £5, it will (in accordance with the Articles) not be distributed to such Shareholder but will be retained by the Company for its benefit.

As an example, a Shareholder holding 1,000 Andes Shares prior to the Capital Reorganisation Record Time will receive, after giving effect to the Capital Reorganisation, 674 New Andes Shares and 325 Andina Shares (after rounding down the fraction). The rights attaching to the New Andes Shares are identical in all respects to those of the Andes Shares.

Existing share certificates have ceased to be valid following the Capital Reorganisation. New share certificates in respect of the New Andes Shares will be issued by 26 July 2012 and will be sent by first class post or airmail at the Shareholder's own risk.

The Andes Shares will be cancelled from trading on AIM at 8.00 a.m. on 12 July 2012 and CREST Shareholders will have their CREST accounts credited with their New Andes Shares. Application has been made for admission to trading on AIM ("Admission") of 198,801,288 New Andes Shares which is expected to become effective at 8.00 a.m. on 12 July 2012.

The directors of Andina plc will be seeking admission for the Andina Shares to trading on AIM and further announcements will be made by Andina in due course.

Neil Bleasdale, Chairman of Andes, commented: "We are very pleased the Court has confirmed the Reduction of Capital, which allows us to complete the demerger of our utility businesses from our E&P business. We are convinced the demerger will result ultimately in the value of each business being reflected more accurately in the stock markets.".

Total Voting Rights

Following Admission of the 198,801,288 New Andes Shares, the total number of issued New Andes Shares will be 198,801,288 New Andes Shares. The Company does not hold any New Andes Shares in treasury. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Service Authority's Disclosure and Transparency Rules.

Capitalised terms used in this announcement are defined in the Circular, unless the context requires otherwise.

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